Magna Mining (TSXV: NICU) has completed an updated preliminary economic assessment for its flagship Crean Hill Project, which is found in Sudbury, Ontario. The revised assessment has outlined a post-tax net present value (8%) of $194.1 million, and an internal rate of return of 129%.
The assessment envisions a scenario whereby the mine would have average underground production of 2,200 tonnes per day, which is to consist of of 1,650 tpd of high margin primary feed, and 550 tpd of low grade incremental feed. Life of mine is estimated at 13 years, with pre-production capital requirements sitting at just $27.7 million following an advanced exploration bulk sample which is estimated to cost $32.1 million.
“This updated Preliminary Economic Assessment focuses efforts on a high margin, underground-only mine plan. A low capital approach of establishing a new surface portal will provide quick access to the resource, allowing us to offset capital costs with early revenues. This PEA also benefits from increased certainty on third party processing terms. The project timeline has been derisked by having environmental permits approved and in-hand, as well as more detailed stope planning and sequence optimization,” commented Jeff Huffman, COO of Magna.
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The estimate is based on US$8.50 per pound nickel, US$4.00 per pound copper, US$13.00 per pound cobalt, US$900 per ounce platinum, US$1,000 per ounce palladium, and US$2,150 per ounce gold. The primary feed meanwhile is said to be designed for rapid payback, minimizing upfront capital requirements, and mitigating against the potential impact of low metal prices.
At current metals pricing however the project features a net present value (8%) of $135.1 million on a post-tax basis.
“The PEA metal pricing assumptions have been updated to reflect a more conservative long term nickel price. We are excited and encouraged by the results of this PEA and look forward to continuing to advance the Crean Hill Project,” continued Huffman.
Magna Mining last traded at $1.15 on the TSX Venture.
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